Average Loan-to-Value (CLTV)
The average combined loan-to-value ratio on home-purchase mortgages originated on properties in a tract.
The Home Mortgage Disclosure Act register defines the field as "the ratio of the total amount of debt secured by the property to the value of the property relied on in making the credit decision" (FFIEC LAR data fields). It is combined rather than first-lien: a second mortgage taken at the same time is included in the numerator, so it captures the total borrowing against the property, not just the principal loan.
The ratio is the inverse of the buyer's equity at purchase. It describes how thin the cushion is between what buyers owe and what their homes are worth, which is what determines how a market responds when prices fall.
Metrics in this family#
Average combined loan-to-value
levelThe average reported combined loan-to-value ratio across home-purchase mortgages originated on properties in the tract.
Applications that did not become loans are excluded, as are refinancings and loans a lender bought from another institution. Where too few loans contribute, no value is reported.
Considerations#
The average is reported over a window of up to three years ending in the most recent published activity year, and each loan counts once regardless of size.
Combined loan-to-value is one of the fields insured banks and credit unions originating fewer than 500 closed-end loans a year may omit under the Act's partial exemption; it is required of full reporters only (OCC Bulletin 2019-12). The Government Accountability Office found partial exemptions removed about 3 percent of the newer data points overall, with at least 91 percent still present in most census tracts (GAO-21-350). Where small depositories do most of the lending, more is missing than that.
The denominator is the value relied on in the credit decision, which is normally an appraisal or the purchase price, not an independent market valuation. It is contemporaneous with the loan and is never updated, so this is loan-to-value at origination and says nothing about equity today.
The measure covers only mortgaged purchases. Cash buyers, who by definition have no loan-to-value ratio, are absent from the register entirely, so a tract with heavy cash buying is described here by an unrepresentative slice of its transactions.
The tract is the tract of the property. Coverage follows institutions above the Act's reporting thresholds, and the published file is revised as institutions resubmit; see the source page.
References#
- 1FFIEC LAR data fieldshttps://ffiec.cfpb.gov/documentation/publications/loan-level-datasets/lar-data-fields
- 2OCC Bulletin 2019-12https://www.occ.gov/news-issuances/bulletins/2019/bulletin-2019-12.html
- 3GAO-21-350https://www.gao.gov/products/gao-21-350